October 21, 2017

The Importance of Creating a Household Budget

All types of families handle their household budget in different ways, though the main goal is to have an idea of how much to spend and how much to save on a monthly or yearly basis. It is highly important to learn how to budget especially when money is tight. Only through budgeting can you save money and not knowing how to do this puts you at risk of losing money when you didn’t have to.

A household budget calculator is an online tool that you can use to determine the amount that you can spend depending on your income. This is essential to families who are very serious about their financial future. Budgeting should be done to manage all of our finances because having this control has the following benefits:

You can monitor what is coming in and out every week or month

With effective household budgeting, you can see what your daily, weekly and monthly expenses are. You can see immediately what action is needed to be taken, or if everything flows smoothly.

Budgeting helps you adapt to different financial circumstances

For example, when your electric bill rises by a few dollars per month, you can check your expenses and see where you can cut corners to make up for this increase.

Reducing your expenses is always the best solution

Budgeting makes it easier to see what expenses you can slash or eliminate, or what you are overspending on. If you have expenses that are standing out in your list, you can identify them and make the necessary changes.

You know the difference between your income and expenses

A household budget doesn’t just determine the money you have versus the money you spend. It also shows the difference between your income and expenses. This shows you whether your budgeting strategy is effective, or ongoing expenses are much more than what you’re earning. The aim is to have leftover money for the things that you want, or save that money for your long-term plans.

Final thoughts

Managing your money will help your family avoid getting into huge debts, and household budgeting will greatly reduce your financial stress. The key is to never spend more than you earn, and this applies to all households, no matter how much the income and expenses are. You can stick to this rule by making a savings plan and you will certainly reach your goal of spending less which will turn into significant savings.

Do you have other ideas on creating a household budget? Share your tips in the comments section.

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Useful Budgeting Apps that Everyone Should Know About

Before, tools that were used for creating a household budget were a pen and paper. But in this day and age when everything goes digital and automated, we see a lot of different online tools and apps that are designed to help people in managing their income and expenses. You can use a household budget calculator, as well as other apps and tools for ease and convenience. Here are some useful budgeting apps that you should know about:

TrackMySPEND

Available at the Apple and Android Stores, this free tracking app is ideal for those who are just getting started with their household budget.  It’s easy to use and understand. You can set up your spending cycle as well as the spending limit.  After that, you can list down your expenses classified into categories, as well as the amount.

Platform availability: iOS and Android

PocketBook

Looking for something basic? Consider this budget tracking app. Its user interface and functions make it easy to use and understand. With PocketBook, you can see all of your transactions in one place and know where your money goes. It also has a feature that divides all expenses into categories with charts so you can analyze your spending easily. And this app is free!

Platform availability: iOSAndroid, and website

MoneyBrilliant

If you’re up for a more comprehensive app to create and organise your household budget, check out MoneyBrilliant. It goes beyond listing down your expenses. It aims to give you a clear picture of your overall finances by including details about your super and investments. It also keeps track of your bill payments. MoneyBrilliant likewise has features that will help you achieve your financial goals.

Platform availability: iOSAndroid, and website

Splitwise

Here’s one useful app for people who like going out for lunch or dinner with friends. Splitwise is designed to make splitting the bill much easier. It creates multiple groups of friends or colleagues, and when it’s time to pay the bill, it keeps track of who still hasn’t given his/her share. You can also receive notifications once an expense is updated or created. This will help you to stick to your budget when dining out. This budgeting tool is free and available at Apple and Android Stores.

Platform availability: iOSAndroid, and website

Make use of budgeting tools so you can keep track of your spending even when you’re on the go. By knowing where your money goes, you can better manage your finances and find more ways to save money.

Do you use other household budget planners? Share your household tips in the comments section.

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Budgeting Plan for New Parents

Having a baby is an exciting affair. There’s a new sense of joy and excitement in the household. Of course, it comes with a lot of changes.  These include your household finances. As new parents, managing the household budget with a new addition to the family can be overwhelming. But don’t worry. There are several things that you can do to manage a budgeting plan. Here are some things to take into account:

Understand your income and expenses

Know how much is coming in and list down all payments that need to be made on a monthly basis. Work around your income and look for areas where you can cut corners.

To keep everything organised, you can use a household budget planner

There are a lot of apps and online budget programs designed to make the budgeting plan a lot easier to manage. You can also use a household budget calculator to give you a clear idea of where your money goes.

Save part of one income while you’re pregnant

Once the baby arrives, the household will only have one income, so be prepared for this situation. There are household budget planners that enable new parents to see estimates of their cash flow for up to one year. In this way, you’ll be able to manage the household budget more effectively.

Ask about your paid leave entitlements

Check if you’re entitled to maternity leave, recreation or annual leave or long service leave. You can also check out the Government website to see if there are tax benefits, baby bonus or paid parental leave that may be suitable for your situation.

Consider pre-loved baby items

It is understandable for new parents to want the best things for their baby. But if you’re on a budget, buying secondhand items is the way to go. Save money by finding great bargains online and retail stores. You can check out garage sales for other baby essentials such as a crib or stroller.

Bulk buying of baby essentials is another way to stay within your household budget

Nappies, baby wipes, and toiletries are some of the things that you can buy in bulk so you can save money.

Think about your child care options

Reach out to relatives or friends who can help you in taking care of the baby, especially if you already need to go back to work. Look for a childcare centre that meets your needs and budget. You can likewise ask your employer if they offer on-site child care.

Got other household budget tips? Share your ideas in the comments section.

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13 Ways to Cut Down Your Monthly Expenses

Australian households vary in their monthly expenses but one thing’s for sure. There are instances when expenses are increasing month after month that it becomes hard to manage. This is especially true if the income of the family stays the same. How can you cut down your monthly expenses? Here are 13 simple ways that you may want to consider:

Create a household budget

Know your income and total expenses for the month and create a household budget. This will greatly help you in managing your money and making sure that everything will be accounted for. You can use a household budget planner and household budget calculator for easier planning.

Buy things that are on sale

Save money by buying things during the sale season instead of paying for the full price. Watch out for annual sale or Boxing Day Sale. You can also visit an outlet mall for purchases at discounted prices.

Save on electricity

Unplug appliances when not in use. Replace incandescent bulbs with LED ones. Use a programmable thermostat so you can manage the heating and cooling settings when you’re asleep or away from home.

Lower your water consumption

Take shorter showers. Regularly check taps for leaks. Use rainwater for watering the plants. Use the dishwasher and washing machine only when they’re full.

Check your bills regularly

You can actually cut down monthly expenses by checking your bills for mistakes. There are cases of errors on receipts, bills, and monthly statements.

Master meal planning

Food accounts for a large part of the monthly expenses. To save money, plan your meals for the entire week and create a list of everything you need for that period. This will help save you a lot of time and money while grocery shopping.

Take a walk or ride your bike

If the office, school or supermarket is within walking or cycling distance, take a walk or ride your bike instead of driving your car or taking the public transport. This will cut down your transportation costs for the month.

Bring your own coffee and lunch for work

The cost of coffee may be little, but if you add everything up, you might be surprised at how much you’re paying for your daily coffee. The same holds true for your lunch. Instead of eating out or buying fancy coffee, make your own food and drink at home and bring them to work.

Buy generic brands

Health bills can be reduced by buying generic medicine instead of the branded ones.

Automate

Pay bills one time and avoid penalties by setting up automatic payments.

Leave the credit card at home

Sometimes, marketing tactics are too strong for our willpower. Avoid impulse buying by leaving your card at home.

Refinance your mortgage or car loan

There may be cases wherein refinancing will help reduce your monthly repayments without dramatically increasing the total cost of your loan. Do some research and see if refinancing will help cut down your expenses.

Negotiate for lower rates

Whether it’s for interest rates or loan payments, it doesn’t hurt to ask if there’s a better plan for you. As they always say, “if you don’t ask, the answer will always be no.”

Do you have other household tips? Share your household budget planner ideas in the comments section.

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Steps to Create Your Household Budget Plan

There are people who enjoy creating household budgets in Australia. They are eager to know how much money comes in, the expenses on a certain period of time, and the ways to cut costs. But for others, budgeting can mean spreadsheets and constant tracking that can lead to disappointment and wasted energy.

Setting up a household budget plan need not be a waste of time and effort. With some consideration, and a household budget planner, you can create a good plan that will help you achieve your goals sooner.

Here are seven steps to create your household budget plan:

1. Set financial goals

A household budget needs goals. What do you want to achieve? Build your savings? Go on a holiday? Buy your own car or home? Knowing what you want can help you stay motivated to stick to your budget plan and meet those goals.

2. Assess your current financial situation

Know your total expenses per month. Check your electric and water bills, receipts, car costs, grocery bills, and mortgage payments. Also, know how much money you’re earning every month. This includes your regular full-time/part-time job, money from investments, etc.

3. Know how much you can spend each month

After knowing your income and expenses, do the math and find out what you actually have for your needs. A household budget calculator will be useful in this step. If it’s lower than what you’ve expected, don’t worry, as this is what the household budget planner is for.

4. Prioritise. With your list of expenses, divide them into two groups: fixed and variable

Fixed expenses include rent or mortgage, while variable expenses are grocery, entertainment, etc. Look at areas where you can cut costs so you’ll have money allotted for more important things such as savings – if that is your goal.

5. Print your completed household budget planner

A vision board works if you see your goals frequently. The same can be true for your household budget plan. Before grocery shopping, check your budget and stick to it.

6. Monitor your progress

Creating a good household budget plan can take some time, so track your spending and income regularly, and make some adjustments when necessary.

7. Revise your household budget plan when there are major changes

Significant changes such as having a baby or losing a job obviously affect your monthly household budget. Be prepared to redo your plan every six months or whenever there’s a major change in your income and spending.

Got other household budget tips in Australia? Share your insights in the comments section.

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How to Create a Wedding Budget

A wedding can be a costly affair in Australia. From the gown and flowers, to the venue, reception, and bonbonniere, it is very easy to overspend and face a large debt long after your wedding day. You do not want to start your married life struggling to get out of debt.

When planning a wedding, one of the important steps to take is to create a wedding budget. Just like in your house where you set a household budget, knowing how much you can spend and where to allocate your money will greatly help in keeping your expenses under control. Here are several ways to create a wedding budget:

Cover the essentials

If you have more than enough funds, then you can have everything that you want in a wedding without worrying about being in debt for a long time. Realistically this is usually not the case. For the money-conscious, make sure to create a priority list.

Essentials that should be in your wedding budget are the dress, suit, celebrant, venue for the reception and ceremony, food, and flowers. List all of these items in order of importance. Then again, it depends on the couple’s preferences. You may want a live band or top-notch photography, but the idea is to identify which components are more important to you. In this way, you’ll be able to allocate funds appropriately.

Look for suppliers

To have a better picture of how much your wedding will cost, do your research and shop around for different suppliers and companies that offer wedding-related services. When grocery shopping, you will most likely have your household budget in mind. When planning a wedding, think about your wedding budget and work around it to ensure that you will not spend too much money.

Keep track of your expenses

If you use a household budget planner to organise all expenses at home, you can do the same when planning a wedding. This will quickly tell you where your money goes and at which parts you can cut costs so you can allot more money for other essentials. This will also keep you on top of everything that costs money and avoid overspending.

Anyone who’s getting married wants an amazing wedding, but this does not mean having to spend what you cannot afford. You’ll only end up paying off debts in your married life. Create a wedding budget and allot funds to wedding aspects that are important to you.

Do you have other tips on how to create a wedding budget in Australia? Share your ideas in the comments section.

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Budgeting After Divorce – When Two Incomes Become One

Not only is a divorce emotionally draining, it also creates a huge strain on your finances. After all of the legal expenses, moving expenses and a host of other divorce related expenses, you are going to be out of pocket. After enjoying the luxury of two incomes, you will need to cut your costs and make some major adjustments to your spending habits. Here are some tips on how to budget after a divorce in Australia.

List all current income sources

You may have one main job but receive money for consulting work that you do on the side or child support. List all your sources of income and an estimate of the amount of money that you know you have coming in every month.

Make a list of your monthly expenses

Record your monthly expenses via a household budget calculator, you will find that there are things that you can eliminate. If you own a car, but it is cheaper to take public transport to work, do so. If you eat out for lunch every day, start taking packed lunch. If you go out with friends twice a month, reduce it to once a month. Whatever is non essential on your list of expenses, get rid of it.

Start looking for ways to make more money

You may have some talents that you haven’t used in a while. Well this is the time to get creative, if there are things that you know you can do to make extra money go ahead and do it. If you can write, start freelance writing, if you can sew, start making clothes, if you are a good handy man, start getting paid to fix things. Whatever talent that you have, allow it to bring you a second income. You can also get a second job in the evening for a while.

Don’t get into any more debt

It may be tempting to get a new credit card in Australia, or increase your overdraft instead of adjusting your budget. This is not a good idea and will lead to a vicious cycle of debt that will be difficult to get out of.

Changes don’t have to be permanent

Don’t get too emotional about cutting out so many of the things that you enjoy, the changes to your budget don’t have to be permanent. Once you have found a way to increase your income, you can slowly start to reintroduce the things that you had eliminated.

Have you recently gone through a divorce and had to adjust your budget? Comment below.

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How to Start a Budget When You Land Your First Job

Starting a budget isn’t that tricky and it’s a great way of getting a head financially.

Congratulations! A first job is a big thing. Take your best friend out for an ice cream, buy your mother some flowers, then start a budget.

Starting a budget now will do three things:

  1. Help you establish good savings habits, which you will have for the rest of your life.
  2. Gets you building wealth early, so you get maximum returns from compounding investments.
  3. It puts you in a better position to do some of the ‘big things’ later in life. You know; have children, travel around the world for a year, start a business, buy a house.

Don’t worry either, a budget doesn’t have to be complicated or restrictive.

All you need to do is pick some goals and figure out when you want to achieve them. Here are some simple steps to get  you start on your budget:

Set yourself some goals.

If you already know you want to quit your job one day and travel around the world that is your goal. Work out when you want to do it and how much it will cost you. You might have multiple goals, that’s fine.

Figure out how much you need to save each week.

You already know how much you will need and when you need it, so simply divide the total amount by the number of weeks left until your goal date. This is how much you need to save each week.

Set up automatic payments to a savings account.

If don’t have one already, look for a savings account in Australia with low/no fees and a competitive interest rate. If it’s possible, have employer to split your pay so some goes directly into your savings account. Otherwise create an automatic, reoccurring transfer which matches your pay cycle. Set it to transfer the amount you figured out above every time you are paid.

Choose a lifestyle that fits with the money you have left over.

A household budget planner or calculator can help you work out your expenses. Once you are saving for your goals, then enjoy your money. This is the beauty of saving first; it almost doesn’t matter what happens after that. One word of caution, though; consider unexpected expenses or once off payments. It’s good to keep a ‘backup’ amount you can use. Don’t waste money, but also don’t feel guilty about spending once you’re achieving your goals.

Once you have your budget worked out here are some simple steps to help you make it work:

  • Track your spending periodically. It doesn’t have to constantly, just do it for a couple of weeks now and then. It will help you understand where your money is going.
  • Make small increases your savings rate. Why not challenge yourself to increase your savings rate each month, even if it is only by $10.
  • Focus on what your budget is allowing you to do, not what it is preventing. Every time you save some money you are achieving a little bit of your goal.

Starting a budget when you land your first job is the best way to build good saving habits and get the most from compound interest. Don’t put it off. Set some goals, save first, then spend.

Checkout our budget tool on our website. www.savings.com.au/calculators/budgeting-tool

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